Swachh Bharat cess of 0.5% on taxable services comes into effect

Cost for the issuance of PAN card has also become costlier by Re 1.

Dining out became a little more expensive from Sunday as the government imposed an additional Swachh Bharat Cess (SBC) of 0.5% on all taxable services in India.

The cess will increase the service tax rate from 14% to 14.5% on all taxable services, including mobile telephone services, travel and PAN (Permanent Account Number) card, from November 15.

"The provisions of SBC @ 0.5% under the Finance Act, 2015, are effective from November 15, 2015. Accordingly, service tax rate (for PAN) is increased from 14 per cent to 14.50 per cent," PTI quoted an official notification as saying.

A PAN card issued by the Income Tax Department to individuals or entities to track their financial activities will become dearer by Re 1, now costing Rs 107, including Rs 93 processing fee and Rs 14 as the newly implemented service tax.

For restaurants, "the cumulative service tax and SBC liability would be 5.8% (14.5% of 40%) of the total amount charged", said the Finance Ministry.

The Centre expects to generate around Rs 10,000 crore from SBC each fiscal. But, with just four-and-a-half months left in the 2015-16 fiscal, it aims at Rs 3,800 crore till 31 March, 2016, reported PTI.

"SBC is not another tax but a step towards involving each and every citizen in making contribution to Swachh Bharat. The proceeds from this cess will be exclusively used for Swachh Bharat initiatives," said the Finance Ministry notification.